Chapter 2: Copyright in the Age of Uncontrolled DistributionOctober 8, 2007

For the past two years, I have been exploring the theme of “the end of control” in thecontext of copyright, and 3 thorny issues have arisen repeatedly: 1) Does themeaningfulness of copyright (as we know it today) actually depend on having,maintaining, and enforcing a controlled distribution environment? 2) If we are indeedunable to control distribution (which, you may have noticed by now, is a recurring themein this book), do we ultimately kill the very idea of copyright? 3) Is there still a differencebetween ‘Performance’ and ‘Copy’?The concept of copyright has been the very foundation of media monetization for a longtime: Every time a copy (i.e., something you could “keep”) was made, a payment had tobe made, a royalty was due, a toll for ownership was extracted. For more ephemeraluses, such as broadcasting — performances you could enjoy only momentarily, but(easily) not keep — only a reduced royalty was due. In fact, for all master recordingsused by terrestrial radio broadcasts in the U.S. there is still no public performance royaltyprovision.This was the simple logic in the good old days of Media 1.0: Pay nothing or very little —or suffer through the ads — for simple access, but pay a lot to keep it. Simple accessmeant few choices and no on-demand playback (i.e., how-and-what-they-want, when-they-want). Keeping it meant physical artifacts, such as videotapes, DVDs, and CDs.Plus, of course, the consumers had to pay even more for actual experiences such asconcerts, shows, and events.Every use is now a Copy - digital devices are content-copying machines.Today, except for those real-life experiences (!), this long-lived logic is ruined by onesimple fact: In a digital network, every performance, every transmission, every merebroadcast is also providing a “free” copy for anyone who cares to have it. Every mediafile arriving in my computer is stored, cached, buffered, whatever you want to call it, inorder to make it visible or audible to me. Every webcast can be stream-ripped (or as weused to say, recorded), and every digital radio signal can be stored and reused. Digitaltechnologies and low-cost, mobile personal computers (such as those that Nokia,Samsung and Motorola used to call mobile phones) have ushered in the era of powerfuland gigantic copy machines — of a zero-cost reproduction of anything that can beshipped in zeros and ones.

There goes the whole idea of charging more for a copy — a keeper — and chargingmuch less for “just listening.” There goes the idea of controlling at what point listeningactually becomes keeping. There goes the idea of selling “units.” There goes the nicelycontrolled value chain that sat on top of the copyright canon of most Western countriesfor the past 100-plus years.The more technology advances, the more it provides faster access to larger contentstockpiles with deep metadata browsed by fast and intuitive search engines on ever cheaper, faster, cooler, and totally mobile devices, the less the traditional principle of “making money because we own and enforce exclusive copyright” applies. The NetGeneration is now in fact serving themselves freely with “stuff to keep, share, and useanytime, anywhere, for anything” that was only meant to be “stuff to listen to, when wesay so, on devices we approve, for the uses we had in mind.” For users, it’s just access,but for the industry it’s a copy — and they want to get paid for the copy.The existing codex of copyright laws will not solve this problem. The principles of intellectual property in content (as opposed to property that is “real stuff” like cars or refrigerators), while still crucial in its principles, intentions, and implications, will not helpus to return control to media in the same way it has existed for the past 100 years.

The new principles of Un-Control

The dawning principles of un-control, however, may just take their place. As a contentcreator, I want attention and exposure first — i.e., an audience that watches, listens, or uses my creations in whatever way. I don’t want to punish them for being interested inme. I don’t want to put up hurdles because I am worried about the lack of control over my users and their behavior.Only if and when my creations prove to be something they like, I want to get rewardedfor creating in the first place, so that I can spend more time to create the next piece. Inother words, I would like to receive remuneration for the use of my work, be it a copy or a performance or whatever other term you can come up with. And for the primary use of my work, i.e., its use or consumption (rather than its secondary use in a new context,such as music for ads or in TV productions), I would beyond a doubt agree that moreuse is always better than less use. The more people “consume” my work the better for me; and I would ultimately expect to receive more remuneration the more people payattention.

The Dilemma of the Media Intermediaries

And therein lies the rub: as a creator, my intention is not to control the spread of mywork; my intention is to create the largest possible trajectory, the biggest velocity, andthe most efficient spread of my work. Only if and when, and after this happens am Iconcerned about a process of getting something back from those users, and rightly so —income comes after exposure; revenues come after attention.As a middleman between the creator and the audience (e.g., a record label, publisher, or rights organization) however, I am facing an entirely different problem: I really don’t wantthe user to have “too much” for free; I don’t want to miss or even delay that crucial pointwhere I – as a gate-keeping entity - could charge them for just taking a look. My dreamcome true is to set up a tollbooth that will make money even if there is another road tothe same destination.

This is, simply put, because as a middleman who usually gets the biggest chunk of theproceedings from “selling copies,” I very likely will not have the same unique benefitsthat the creator himself may have by achieving the largest possible level of exposure. Mybrand is not his brand. My record company does not benefit from his audience outside of those who buy copies.As a traditional record label, for example, I may only earn my dollars from some specificchunks of the creator’s total output (such as CDs or a la carte downloads). Therefore, Ineed to make sure that the creator himself does not provide “for free” what used to bepaid-for (i.e. in return for the exposure that he may find more valuable - see the latestPrince debacle, or the Radiohead's new release strategy), and that the user does not just get those things “for free”, either. Thus, publishers may not give blanket permissionfor non-commercial synchronization deals on behalf of their writers, performing-rightsorganizations declare on-demand streaming on social networks to be outside their jurisdiction, record companies offer certain records (and downloads) only in certainmarkets, and many book publishers don’t want all of their books’ content searchableonline.

Selling Friction Removal?

This thinking harks back to the popular media mogul's illusion that one can indeed butsuccessful in creating new friction points that the user will need to navigate, i.e. bymaking payments to unlock the goodies. In other words, it is not the content I sell, it’s theremoval of friction to get to it. You, the user, simply buy the green light to “make a copy.”I believe that this approach is now deeply flawed: The much-cherished friction isvanishing more quickly every day, and every access point is now a copy point as well.Will the media industries now face the revenge of the victims of friction?Consider this: What good is the idea of a copy of digital content — and of the exclusiveright of the author to allow that copy to be made in the first place — when in fact everysingle transmission of digital content, and every use of a computer, inadvertently createsmultiple and perfect copies along the way? This inadvertence essentially creates serialcopyright infringers every nanosecond.

King Kopyright vs. Godzilla

If anyone can make a perfect digital copy, and share it, and redistribute it, what does thatsay about the traditional media industry mantra that ownership and enforcement of copyrights is what really drives revenues? Which is worth more: ownership of copyrights(which includes the right to deny a copy), or simply providing access to copyrightedmaterials (see Google and other search engines, ISPs, software companies, etc.)? IsContent King or is Attention Godzilla?Here is one fact I think we urgently need to face in this age of explosive growth inwireless broadband and the increasingly ubiquitous presence of all content: While itmay, in principle, be desirable to be able to block or otherwise control access to one’scontent (e.g., via release windows or territorial release schedules in the film business),or to put up hurdles that the users need to overcome by making a payment, this conceptdoes not seem very realistic – to say the least - when looking at how content is flowingthrough digital networks today. And we don’t even have the most populous countries inthe world (China, India, Brazil, etc.) connected to broadband yet! Furthermore, once they